J. C. Penney misses by $0.01, misses on revs; reaffirms positive adj. EPS, $1 bln in EBITDA for FY17 despite cutting comp, gross margin guidance :
- Reports Q3 (Oct) loss of $0.21 per share, excluding non-recurring items, $0.01 worse thanthe Capital IQ Consensus of ($0.20); revenues fell 1.4% year/year to $2.86 bln vs the $2.95 bln Capital IQ Consensus.
- Comparable sales were (0.8)% for Q3 vs. ests above +2%, providing a two-year stack of 5.6 %.
- For the quarter, Sephora, Home, Salon and Fine Jewelry were the Company's top performing divisions.
- Geographically, the Pacific and Northwest were the best performing regions of the country.
- Gross margin was 37.2 % of sales, a 10 basis point decline compared to the same period last year.
- Guidance:
- Comparable store sales: expected to now increase 1% to 2% down from +3-4%
- Gross margin: expected to now be flat versus 2015 from +10-30 bps
- SG&A dollars: expected to decrease versus 2015
- Reaffirms EBITDA expected to be $1 billion and adjusted earnings per share: expected to be positive vs. $0.14 consensus.
- "We are pleased to see strong sales performance in the growth initiatives we discussed at our most recent analyst meeting. The results of these initiatives are reflected in a positive sales comp in the month of October, driven by over 200 basis points of comp benefit from our 500 new appliance showrooms. We view our October sales results - specifically our acceleration in the last two weeks of the month - and the benefit from appliances as examples of what we expect for the balance of the fourth quarter.
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